Which of the following transactions would not create a cash flow? Group of answer choices A)Sale of equipment at book value (i.e. no gain or loss). B)Declaration of a cash dividend. C)Purchase of a patent. D)The company purchased some of its own stock from a stockholder. E)All of the above create cash flows.

Which of the following transactions would not create a cash flow? Group of answer choices A)Sale of equipment at book value (i.e. no gain or loss). B)Declaration of a cash dividend. C)Purchase of a patent. D)The company purchased some of its own stock from a stockholder. E)All of the above create cash flows.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Which of the following transactions would not create a cash flow?

Group of answer choices

A)Sale of equipment at book value (i.e. no gain or loss).

B)Declaration of a cash dividend.

C)Purchase of a patent.

D)The company purchased some of its own stock from a stockholder.

E)All of the above create cash flows.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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